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Wheeler indicated more easing was likely and said the strength of the currency was making it difficult to meet his 1-to-3 per cent inflation target band.

If the kiwi doesn't depreciate as the Reserve Bank assumes, an alternative scenario indicated the bank could cut the benchmark rate to as low as 1 per cent.

"The market was looking for 50 points more than we probably thought," said Mitchell McIntyre, senior corporate FX dealer at NZForex in Auckland.

"Most banks are calling for another one or two cuts out of New Zealand over the course of 2016, but I don't think it's going to do too much to drive the currency lower unless they do come out and do 50 in one hit."

NZForex's McIntyre said he expects the kiwi to trade between US69c and US72.5c until the Federal Reserve gives clearer guidance on when it will resume raising interest rates.